Pa. revenue from Marcellus Shale less than expected

A re-evaluation of state personal income tax returns has shown Pennsylvania received much less tax money than it expected from natural gas royalties.

Pennsylvania’s Department of Revenue last week released an updated report on how much Marcellus Shale-related revenue it received in personal income taxes — a figure that shines light on the amount, in rent and royalties, that state residents are receiving from gas companies.The report downsized its original estimate of $102.7 million to an actual figure of $46.2 million, a revision that Sharon Ward, director of the liberal-leaning Pennsylvania Budget and Policy Center, said ran against industry claims its tax contributions were sufficient.

“We have maintained that the industry for a long time has overstated the economic benefit of Marcellus Shale gas drilling and understated its impact,” Ward said. “This revision by the Department of Revenue is an acknowledgment that their optimistic estimates have not been borne out.”

Revenue Department spokeswoman Elizabeth Brassell said both its earlier estimate and its newly released report were objective and based on facts.

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The first estimate was made in May based on payments received, and the numbers were updated after the department began to pay out income tax returns in October and discovered many taxpayers had overestimated their liabilities.

“We found more repayment was due than we had previously counted on,” she said.

The Department of Revenue only recently began reporting gas industry-specific data and Brassell said there are still kinks to its tracking system that needed to be worked out.

“We’re still working at refining our model, but I don't know if we’ll ever get there,” Brassell said.